Guidry v. Wells Fargo N.A.

Filing 20

MEMORANDUM OPINION AND ORDER granting in part and denying in part 16 MOTION to Dismiss 1 Complaint, and Memorandum of Law in Support. Stay lifted. Plaintiffs' wrongful foreclosure claim and requests for declaratory and injunctive relief are dismissed without prejudice. (Stay lifted. Discovery due by 4/14/2017. Joint Pretrial Order due by 5/5/2017. Docket Call set for 5/12/2017 at 03:00 PM in Courtroom 9B before Judge Sim Lake) (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)

United States District Court
Southern District of Texas

ENTERED
January 04, 2017

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

CHEJUANA GUIDRY and WARWICK
GUIDRY,

§
§
§
§
§
§
§
§
§
§

Plaintiffs,

v.
WELLS FARGO BANK, N.A.,
Defendant.

David J. Bradley, Clerk

CIVIL ACTION NO. H-16-2618

MEMORANDUM OPINION AND ORDER

Pending before the court is Defendant's Motion to Dismiss and
Memorandum of Law in Support
No.

16).

("Motion to Dismiss")

(Docket Entry

Plaintiff has not responded to Defendant's Motion to

Dismiss, and the motion is therefore treated as unopposed. 1

But

failure to oppose the motion is not in itself grounds for granting
the motion.

Servicios Azucareros de Venezuela, C.A. v. John Deere

Thibodeaux,

Inc.,

702 F.3d 794,

806

(5th Cir.

2012).

The court

must assess the legal sufficiency of the complaint to determine
whether dismissal is warranted.

Id.

Accordingly,

the merits of

the Motion to Dismiss are discussed below.

1

See Local Rules of the United States District Court for the
Southern District of Texas, Rule 7.3 ("Opposed motions will be
submitted to the judge 21 days from filing without notice from the
clerk and without appearance by counsel.") and Rule 7.4 ("Failure
to respond will be taken as a representation of no opposition.").

I.

Factual and Procedural Background

Plaintiffs Chejuana and Warwick Guidry allege 2 that in April
of 2006 Plaintiff 3 obtained a mortgage loan from Wells Fargo Bank,
N. A.

("Wells Fargo")

("the Property").
2012.

secured by Plaintiff's principal residence

Plaintiff defaulted on the note in the fall of

Plaintiff applied for a loan modification under the Home

Affordable Mortgage Program ( "HAMP") , believing that doing so would
forestall foreclosure while the application was pending.
October

of

2012

and

May

of

2013

Plaintiff

Between

completed

two

applications and submitted supplemental income documentation at
Defendant's request.
In May of 2013 Defendant notified Plaintiff that a foreclosure
sale would take place on June 4,
request

documentation

application.

in

2013.

support

of

Defendant continued to
the

loan

modification

Plaintiff received another notice of foreclosure sale

on July 15, 2013.
On

August

representative

2,
of

2013,

Plaintiff

Defendant

and

government-sponsored HOPE hotline.

a

spoke

with

an

representative
Plaintiff was

unnamed
from

the

told that no

foreclosure sale would occur until her modification application was

2

Factual allegations are taken from Plaintiffs' Original
Complaint & Application for Injunctive Relief
("Plaintiffs'
Complaint"), Docket Entry No. 1, pp. 2-3 ~ 6.
3

Plaintiffs' Complaint uses the singular "Plaintiff" and
plural "Plaintiffs" interchangeably without explanation. The court
attempts to track the pleadings for consistency where doing so does
not introduce confusion.
-2-

either granted or denied.

Defendant foreclosed on the Property on

August 6, 2013, at a non-judicial foreclosure sale for $10.00.
Plaintiff alleges claims for breach of contract, promissory
estoppel,

and

wrongful

foreclosure.

Plaintiff

also

declaratory and injunctive relief and attorney's fees.

seeks

Defendant

moves to dismiss all claims for failure to state a claim upon which
relief

can

12(b) (6).

be

granted

under

Federal

Rule

of

Civil

Procedure

Each claim will be analyzed under the standard of review

set forth below.
II.

Applicable Law

Under the Federal Rules of Civil Procedure a pleading must
contain "a short and plain statement of the claim showing that the
pleader is entitled to relief."

Fed.

R.

Civ.

P.

8 (a) (2).

A

plaintiff's pleading must provide the grounds of his entitlement to
relief, and "a formulaic recitation of the elements of a cause of
action will not do.
S.

Ct.

1955,

II

(2007).

1965

Bell Atlantic Corp. v. Twombly,
"' [N]aked

assertion[s]'

devoid

127
of

'further factual enhancement'" or "[t] hreadbare recitals of the
elements

of

a

cause

of

action,

statements," do not suffice.
1937, 1949 (2009).

supported

by

See Ashcroft v.

mere

Igbal,

conclusory
129 S.

Ct.

"[C]onclusory allegations or legal conclusions

masquerading as factual conclusions will not suffice to prevent a
motion to dismiss."
F.2d 278,

284

Fernandez-Montes v. Allied Pilots Ass'n, 987

(5th Cir.

1993).

Instead,

"[a)

claim has facial

plausibility when the plaintiff pleads factual content that allows
-3-

the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged."
A Rule 12(b) (6)
pleadings

and

is

Iqbal, 129 S. Ct. at 1949.

motion tests the formal sufficiency of the

"appropriate

when

a

defendant

attacks

the

complaint because it fails to state a legally cognizable claim."
Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert.
denied sub nom. Cloud v. United States, 122 S. Ct. 2665 (2002).

To

defeat a motion to dismiss, a plaintiff must plead "enough facts to
state a claim to relief that is plausible on its face."
127 S. Ct. at 1974.

Twombly,

The court does not "strain to find inferences

favorable to the plaintiffs" or "accept conclusory allegations,
unwarranted deductions, or legal conclusions."

Southland Securities

Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353, 361 (5th Cir.
2004)

(internal quotation marks and citations omitted).

"[C]ourts

are required to dismiss, pursuant to [Rule 12(b) (6)], claims based
on invalid legal theories, even though they may be otherwise wellpleaded."

Flynn v.

State Farm Fire and Casualty Insurance Co.

(Texas), 605 F. Supp. 2d 811, 820 (W.D. Tex. 2009)

(citing Neitzke

v. Williams, 109 S. Ct. 1827, 1832 (1989)).
III.
A.

Application

Breach of Contract

"Under Texas law, the elements of a breach of contract claim
are (1) the existence of a valid contract;
plaintiff;

( 3)

breach

of

the

contract
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(2) performance by the
by

the

defendant;

and

(4) damages sustained by the plaintiff as a result of the breach."
Sport

Supply

Group,

Inc.

453, 465 (5th Cir. 2003)

v.

Columbia

Casualty

Co.,

335

F.3d

(citations omitted).

Plaintiff's claim is based on Defendant's alleged failure to
perform under the "agreement based on the modification application."
Plaintiff references the following language in the letters from
Wells Fargo dated October 31, 2012, and November 30, 2012:
We' 11 continue to work with you to help you avoid a
foreclosure sale. If your mortgage has not been referred
to foreclosure while we are working with you and
reviewing your documents, you will not be referred to
foreclosure while the application is pending. If your
mortgage has been referred to foreclosure, if allowed by
state law and/or investor guidelines, your home will not
be sold at a foreclosure sale.
(Exhibit B-1,

Attachment 4,

Docket Entry No.

1-3,

pp.

54,

57)

Plaintiff alleges that she performed under the contract by pursuing
the

application,

foreclosing,

and

that
that

Defendant
she

breached

suffered

the

damages,

contract

including

by
lost

opportunities to pursue other forms of mitigation, as a result.
Defendant argues that (1) Plaintiff's claim fails because she
was in breach of the Deed of Trust or the Note,

(2) Plaintiff fails

to identify the provisions of the contract that were allegedly
breached, and (3) that Plaintiff's claims are barred by the statute
of frauds.

Defendant's arguments that no valid contract existed

fail to address the fact that Plaintiff's claim is predicated on a
separate agreement, containing the specific language cited above,
and made in writing in the above-referenced letters.
Plaintiff's

factual

allegations
-5-

are

true

and

Assuming

construing

all

reasonable inferences in her favor, Plaintiff has stated a facially
plausible claim to relief for breach of contract.
B.

Promissory Estoppel

To state a

claim for promissory estoppel,

plaintiffs must

plead (1) a promise; (2) foreseeability that plaintiffs would rely
on the promise; and (3)
Henry Schein,

Inc.

v.

substantial reliance to their detriment.
Stromboe,

102 S.W.3d 675,

686 n.25

(Tex.

2003) (citing English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983)).
Promissory estoppel
claim.
3096,

is an alternative

to a

breach of

contract

Carrillo v. Bank of America, N.A., Civil Action No. H-122013 WL 1558320, at *8

Allied Vista,
Houston

Inc.

v.

[14th Dist.]

Holt,
1999,

(S.D. Tex. April 11, 2013)
987 S.W.2d 138,

pet.

denied)).

141

(Tex.

(citing
App.

"Promissory estoppel

does not create a contract where none existed before,

but only

prevents a party from insisting upon his strict legal rights when
it would be unjust to allow him to enforce them."
State

Bank

of

Corpus Christi

Palacios,
2001,

44

no pet.)

S.W.3d

121,

(citing

139

"Moore"

Ford v. City
(Tex.

App.

Burger,

Inc.

v.

Phillips Petroleum Co., 492 S.W.2d 934, 937 (Tex. 1972)).
Plaintiffs

allege

that

they

"did

not

pursue

other

loss

mitigation options like short sale, deed in lieu of foreclosure, or
alternative financing while [awaiting] the decision from the Bank
on the modification application." 4

4

Plaintiffs' Complaint, Docket Entry No. 1, p. 5
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~

10.

Defendant argues that the alleged promise was not sufficiently
definite,

that Plaintiffs fail

to show reasonable or justified

reliance, and that Plaintiffs do not show that they did anything in
reliance on the alleged promise other than not taking legal or
other action to try to preclude foreclosure.

Defendant has not

established that the promise not to foreclose while the application
was pending was indefinite as a matter of law.
show

that

Plaintiffs'

unjustified.

alleged

reliance

Nor does Defendant

was

unreasonable

or

Finally, Defendant does not cite any authority for

the proposition that foregoing action to prevent foreclosure is not
sufficient for detrimental reliance.

Defendant's statute of frauds

argument fails insofar as Plaintiffs' rely on Defendant's written
statements.

Plaintiff's estoppel claim therefore survives

the

Motion to Dismiss.
C.

Wrongful Foreclosure

The three elements of wrongful foreclosure are:
in

the

foreclosure

sale proceedings i

( 2)

a

"(1) a defect

grossly inadequate

selling pricei and (3) a causal connection between the defect and
the grossly inadequate selling price."

Charter National Bank--

Houston v. Stevens, 781 S.W.2d 368, 371 (Tex. App. -- Houston [14th
Dist.]
for

1989, writ denied)

wrongful

property.

foreclosure

See Barcenas v.

Action No. H-12-2466,
2013)

Plaintiffs cannot maintain an action
while

remaining

in possession of

Fed. Home Loan Mortgage Corp.,

2013 WL 286250, at *7

(collecting cases).

(S.D.

the

Civil

Tex. Jan.

24,

Plaintiffs allege that they "currently
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possess" the Property and have provided no subsequent information
to

the

contrary. 4

They

therefore

cannot

maintain

a

wrongful

foreclosure claim, and this claim will be dismissed.
D.

Declaratory and Injunctive Relief

Plaintiffs
foreclosure

sale

seek

a

and

declaratory

injunctions

judgment

to

prevent

to

foreclosure

aside

eviction.

uncontested that the foreclosure sale is complete.
be entitled to have a

set

the

It

is

"(I]n order to

sale set aside

in Texas,

a

plaintiff must actually tender -- not just offer to tender -- the
full amount owed on the note."

Hill v. Wells Fargo Bank, N.A.,

Civil Action No. V-12-11, 2012 WL 2065377, at *9 (S.D. Tex. June 6,
2012)

(collecting cases).

Plaintiffs have alleged no such tender

and are therefore not entitled to declaratory relief.
Plaintiffs seek injunctive relief to prevent enforcement of a
state court Final Judgment and Writ of Possession.

Under the

Rocker-Feldman doctrine, "federal district courts lack jurisdiction
to entertain collateral attacks on state court judgments."

Weaver

v. Texas Capital Bank N.A., 660 F.3d 900, 904 (5th Cir. 2011).

A

state court judgment is attacked for purposes of Rocker-Feldman
when the

losing party in a

state court action seeks

"what in

substance would be appellate review of the state judgment."

Id.

(citing Johnson v. De Grandy, 114 S. Ct. 2647, 2654 (1994).

This

court cannot review the state court's determination of the right to

4

Plaintiffs' Complaint, Docket Entry No. 1, p. 1
-8-

~

1.

possession directly.

Nor can it enjoin enforcement of the Writ of

Possession before the relevant claims are decided.

See Knoles v.

Wells Fargo Bank, N.A., 513 F. App'x 414, 416 (5th Cir. 2013)

("The

relief sought, in practical effect, would enjoin Wells Fargo from
enforcing a valid extant judgment of a Texas court.
court

is

denied

jurisdiction

Anti-Injunction Act,

28 U.S.C.

to
§

grant

2283.").

that

The district

relief

by

the

This court therefore

cannot grant injunctive relief.
E.

Attorney's Fees

Because Plaintiffs'
remains viable,

cause of action for breach of contract

judgment on attorney's fees would be premature.

The court will address Plaintiffs' request for attorney's fees at
the appropriate time.
IV.
For the reasons

Conclusions and Order

explained above,

the court concludes that

Plaintiffs have pleaded legally cognizable claims for breach of
contract or, in the alternative, promissory estoppel.
wrongful

foreclosure

claim

and

requests

for

declaratory

injunctive relief are DISMISSED without prejudice.
Motion to Dismiss

(Docket Entry No.

16)

Plaintiffs'
and

Defendant's

is therefore GRANTED in

part and DENIED in part.

It is the court's normal practice, as has been explained to
counsel for Wells Fargo, to allow only one dispositive motion per
party, and the court sees no legitimate reason to make an exception
-9-

in this case.

There will

therefore be no

further dispositive

motions by the Defendant.
Because the court has ruled on the pending Motion to Dismiss,
the court's Order Granting Unopposed Motion to Stay (Docket Entry
No. 19) is LIFTED.
2017.

The discovery cut-off is extended to April 14,

The joint pretrial order is due May 5, 2017, and docket call

will be held on May 12, 2017, at 3:00 p.m.
SIGNED at Houston, Texas, on this 4th day of January, 2017.

SIM LAKE
UNITED STATES DISTRICT JUDGE

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